Driven by a struggling economy and health care reform threatening commissions, many brokerages across the country are making plans to consolidate, sell or join larger firms.

But the 45 member firms of Benefit Advisors Network, known as Smart Partners, are taking the opposite approach. They are more resolute than ever in maintaining their independence and positioning themselves for growth in today's unstable environment.

Executive Director Perry Braun sat down with EBA to discuss BAN's plans for continued expansion, dealing with uncertainty around the November elections, and how member firms are combining their resources to address client concerns with focused expertise.


For those who aren't familiar your group, would you explain what BAN is?

Benefit Advisors Network is a network of independent agencies across the country that wish to remain independent, but recognize there are some very disruptive forces in the marketplace.

They come together in order to share ideas and to work collectively around problems that affect their clients, their businesses and business models. It's a way for them to deal with the future on a collective basis rather than as individuals trying to compete in a marketplace that's dramatically changing.

So we bring an opportunity to scale out some significant expenses, share some capacity, share some technology, share some intellectual resources with each other. Doing so allows each member of BAN to compete in a marketplace that is becoming more and more competitive for [employee benefit brokerages].


What's your state of mind as health reform moves forward?

Benefit Advisors Network is in a good place right now. Agencies following the Supreme Court decision are examining what their options are and what sort of things they need to do to adjust their business models. Organizations like ours represent an opportunity for members to be big without necessarily getting big on their own, and sinking a lot of expense into it.

[Joining Benefit Advisors Network] can be an excellent transition step for them as they think about the long-term future prospects of their business model and align themselves with folks who have already done certain things to make adjustments. They can learn from them as they apply it to their own model. So I think we're in a good spot right now.


Do you have a strategy for expansion?

As for Benefit Advisors Network, our interest is to continue to grow around different parts of the country and add more agencies that align with our DNA, which is built around sharing ideas, sharing insecurities and things that keep you up at night, then working collaboratively with [like-minded] people to solve problems.

If you're talking about the agencies, we bring a couple of different opportunities for them. We don't think of ourselves just as an expense. We think of ourselves as trying to find revenue opportunities for agencies as well, so we have developed a business model that is not just an outflow of money as an expense from an agency but also an inflow opportunity back to that agency. We've aligned partners who have diverse business models themselves. So if you are exclusively in one line of business and you're thinking about expanding into others we have agencies that have business models that are of multiple disciplines that you can learn from.


What does that brain trust look like nationally?

Our business model is pretty simple. We hold two educational conferences each year, one takes place in February and one takes place in August.

The February one is focused primarily on business marketplace development - ideas, opportunities and strategies. In August we focus primarily on retention activities - things that are keeping clients up at night and how we are addressing those things along with clients.

Between those meetings we have monthly telephone conference calls. We cover a variety of topics. Either vertically, which are things that are in the marketplace such as certain industries.

We focus on certain industries more than others because there's a collection of agencies around those industries and they're trying to grow and expand in them, so we develop the intellectual capacity to understand what those clients' wants and needs are.

And then also horizontally, which allows us to consider some very specific topics affecting multiple industries and agencies. The most common topics today are compliance and regulatory issues.

So we have built intellectual subject matter experts within different agencies that can tackle horizontal aspects of the business such as compliance, and ERISA issues. Things that their clients are asking them about that are more technically oriented.

This knowledge is gleaned from and shared throughout the country, but is housed at the agency through subject matter experts. And those folks tend to meet monthly in teleconference calls.


What is the frame of mind of the collective agencies as we approach the elections? What is your big focus?

The focus, first and foremost, will be our clients. Depending upon their size, depending upon their industry, what will be their reaction to the implementation of various activities within health care reform, speaking specifically about benefits around 2014? [With the start-up of purchasing exchanges and other provisions of the Patient Protection and Affordable Care Act.] Because that's only a year away. They need to address their plans specific to that, and our folks need to help them navigate through their questions.

First and foremost is the economics of it, the tax penalty side, the credit side, the subsidy side of the equation. Next within that is the distribution. In other words, do you buy through an exchange or not through the exchange?

You always have to balance these questions within the culture of an employer. Some employers have a paternalistic culture and feel that benefits are an important part of that culture's dynamics for an employee.

The third component of this, beyond the pure economics and the culture of the company, is how it aligns with an employer's attraction and retention policies for employees. And that is different based on the industry that you're talking about.

So there is a variety of things that the agencies will be dealing with on a strategic level. So September and October of this year will be how to position that client to get ready for 2014.

What are the transition steps? This includes communication and education - not just for the employers' senior team and human resources staff, but also the employees. The employees will have questions themselves and they're going to want to understand how they should react and plan ahead for 2014.

In addition there will be lots of questions about the political environment, and the federal election will be first and foremost, but let's not forget the local level. Because a number of states are already moving out on the exchanges, and those will be additional questions these folks are going to have to be prepared to answer. How does that factor into an employer's strategy? Not just for 2013, but to position it and transition it well for 2014.

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